What's going on?

US stocks scaled new heights on Friday, and stocks in Europe also had a positive week � putting a recent bout of weakness firmly in investors� rearview mirrors.

What does this mean?

Stocks around the world hit a rough patch two weeks back, as investors appeared rattled by the risk that some big companies had borrowed more money than they could afford to pay back. But it didn�t take long for 2017�s dominant trend � rising stock prices � to reassert itself.


Leading the way higher were familiar friends: technology stocks like Facebook and Amazon, which have performed significantly better than the market overall this year. But stock prices of old-school retailers, like Macy�s, also did well last week, as investors bet that low unemployment and high consumer confidence will lead to a stronger-than-usual boost in sales over the holidays.

Why should I care?

For markets: China is a notable weak spot.

Missing out on the Thanksgiving bonanza was China (tweet this), where stocks on Thursday had their biggest one-day fall in over 18 months. The Chinese government is implementing lots of initiatives aimed at reducing the growth of borrowing (i.e. debt) within its economy. While that is probably healthy over the long term (too much debt is usually a bad thing), investors are fretting that it will lead to less economic growth � and therefore less profit for companies � in the short term.


The bigger picture: It�s almost time to focus on next year�

Investors are settling into what�s normally a relatively quiet time of year for stocks. Attention is turning to next year and a number of Wall Street research analysts have already published their expectations for 2018. The consensus view is that companies� profits will grow more than 10% next year and that stock prices, which are heavily influenced by profits, will grow by almost the same amount. It�s worth noting, however, that the consensus view is often wrong!